A Study On Influence Of Financial Development To Product Export Sophistication

Financial development, as an important factor that can affect the export trade, has caught the attention of academia in recent years gradually. As Hausmann (2005) put forward the index of "export sophistication", the index is widely accepted, the effects of financial development on export sophistication of theoretical and empirical studies began to appear in domestic literature. On the basis of predecessors’ research, this paper attempts to comb the influence mechanism of financial development affecting export sophistication, and based on industry level data, use the empirical method for the impact of financial development on export sophistication.Firstly, by analyzing the mechanism of financial development affect export sophistication, this paper concluded that financial development can ease financial markets "information asymmetry" phenomenon, and avoid the "adverse selection" and "moral hazard" problem, which can improve the allocation efficiency of financial resources; Financial resources allocation efficiency affects the production activities of enterprises of different types of risk directly. When the financial resources allocation efficiency is high, risk of small enterprises to obtain more financial resources, and risk of enterprises get fewer financial resources. After enterprises that have small risk obtain financial resources, they can use it to research and development activities, then export sophistication of products can be promoted. Above all:countries with high level of financial development tend to specialized product with high export sophistication, countries with low level of financial development tend to specialized product with low export sophistication.Secondly, based on 20 manufacturing industries data in Jiangsu province in 2005-2011, this paper figures out the export sophistication of the 20 industries, which is interpreted as a source of empirical data.In the empirical part of the paper, it use efficiency of financial development, financial market competition degree, financial market decision-making degree to measure financial development degree, and add relevant control variables in the empirical model, adjust and virtual variables, and use the system GMM estimation method, this is the following empirical results:Considering the external shocks of financial crisis in 2008 on the export trade, each 1% of financial development efficiency increase, can promote products export sophistication 1.707%; each 1% of financial market competition degree increased, can promote products export sophistication 4.56%; each 1% of financial market decision-making degree increase, can promote export sophistication 1.291%.Finally, the paper aimed at how to promote financial development effect for product export sophistication and make three countermeasures:improve the information processing ability of financial institutions, strengthen the supervision of financial resource utilization efficiency, optimize the structure of financial markets.